Is Socialism Making a Comeback?

Thanks to Bernie Sanders, socialism is sexy again. Or, we might say, Marxist red is the new black.

Conor Lynch, writing for Salon, identifies the rise of self-proclaimed socialist Bernie Sanders and the reinvigoration of the Democratic Socialists of America, as proof that socialism is back as a new socio-political force. He writes:

A long-established political tradition is returning to prominence after many decades in the wilderness, in response to an unsustainable economic system that has generated vast inequality and injustice. Young people are at the forefront of this movement not because they have been brainwashed by bearded commie professors, but because they are the ones who have to live in the future that is threatened by capitalism today.

The attraction is easy to understand. It was capitalism that gave us the 2008 GFC, while socialism is touted as an economic philosophy aimed at making society just and fairer. Who wouldn’t want that? If that is socialism, then sure, I’m a socialist!

But there are two problems.

First, socialism is not the necessary condition for creating socio-economic equality. One can pursue economic justice within an open market economy by a progressive tax system and even fund a welfare system with the prosperity that a free market creates. In fact, one could argue that you cannot share wealth unless you create wealth, so capitalism is needed in order to create the prosperity required to fund the infrastructure and safety net that Australians want.

Second, socialism, in all its diverse forms, is essentially an economic system that focuses on state control of the means of production and its distribution with additional characteristics associated with abolishing private property and redistributing all wealth. Communism is simply socialism by force, usually controlled by a centralized and non-democratic government, which uses state power to enforce its policies.

By that definition, Bernie Sanders is not really a socialist. He is not interested in controlling the number of iPads that Apple produces, regulating their price, and determining when and where they are sold. He simply believes in big government, lots of free stuff, and abundant welfare. What Sanders is advocating is more like the new deal dressed up in 21st-century progressive apparel. Or, if you can picture it, imagine if FDR and Lady Gaga made a baby.

Now if you can pay for generous state welfare with free university tuition and cheap public transport through an efficient taxation system that still encourages investment, promotes growth, maintains good economic fundamentals, creates jobs and upward mobility, and rewards productivity, then all power to you. However, as many western nations have discovered, it difficult to afford even a modest welfare state let alone a utopian one without incurring gargantuan deficits that will one day cripple the economy and inevitably lower living standards.

Part of the problem is that when many people think about socialism they seem to have some kind of romantic vision of northern European countries like Sweden or nostalgia for South American Marxist martyrs like Che Guevara. What they are forgetting is that Sweden, and the Scandinavian countries generally, are not socialist, but are free market economies (see here). What is more, countries that have recently taken the road of socialism, like Venezuela, have turned their resource-rich nation into a nightmare of economic misery where even democracy is now under threat (see here). And I don’t see any leftists threatening to move to Venezuela to escape Trump, Turnbull, or May.

Ultimately socialism fails because, well, as Margaret Thatcher said, “The problem with socialism is that eventually you run out of other people’s money.” It is one thing to create an equitable tax system, to redistribute wealth through government services and the like, make corporations pay their fair share, but it has its limits. That is because money can move. And if you keep pilfering it, people and corporations will simply move their money out of your grasp. I mean, just ask French actor Gerard Depardieu why he moved to Belgium?

Our best hope is for a pluralistic democracy with a free market economy characterized by economic opportunity, upward mobility, minimal regulation, a genuine safety net, and creating wealth that all Australians will be able to access.

So, despite all the glamour associated with socialism, thanks to Bernie Sanders and Jeremy Corbyn, I have to point out that what they are offering is not socialism. It is just big government and big deficits, driving policies that will not in the long term actually help people, just make their future all the more precarious.

So the next time you see a suburban millennial or an inner-city Gen Xer touting the virtues of socialism, it might be a good idea to ask if they even know what they are talking about. Have they lived in Venezuela recently? Do they remember why the USSR failed? Then perhaps offer them the wise words of Winston Churchill: “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of all miseries.”